The following information is provided for ABC Retail Inc.

Shareholders' Equity Dec. 31, 2020

Preferred stock, $50 par, 4,000,000 shares authorized, $3,050,000

61,000 shares outstanding

Common stock, $1 par, 1,000,000 shares authorized, $800,000

800,000 shares outstanding

Paid-in capital in excess of par $200,000

Retained earnings $35,730,000

Total shareholders' equity $ 39,780,000

Additional information

Preferred dividends paid in 2020 $240,000

Common dividends paid in 2020 $840,000

Net income for year ended December 31, 2020 $2,250,000

Average common shareholders' equity $25,000,000

The company's payout ratio is (round your answer to two decimal places)

A. 0.42

B. 0.48.

C. 0.37.

D. None of the other answers is correct.